Swiss freight firm says in talks with Kuwait's Agility on possible tie-up

Panalpina Welttransport Holding says talks with Agility are at a preliminary stage
Swiss freight firm says in talks with Kuwait's Agility on possible tie-up
By Bloomberg
Fri 15 Feb 2019 11:00 AM

Panalpina Welttransport Holding has said it is in talks on a tie-up with Kuwaiti logistics provider Agility, a deal that would help the Swiss freight forwarder bulk up and fend off interest from Denmark’s DSV.

The talks are at a preliminary stage and Panalpina is still reviewing an approach by DSV, the company said Friday in a statement.

People familiar with the situation said Thursday that negotiations about combining Panalpina and Agility are progressing and that a transaction is backed by the Ernst Goehner Foundation, Panalpina’s biggest shareholder. That support could be key. The foundation, which owns 46 percent of Panalpina, rebuffed DSV’s unsolicited $4 billion offer this month.

A Panalpina-Agility merger would likely include a stock element, and Ernst Goehner plans to retain a stake in the combined entity, the people said.

An agreement could be struck as early as this week, one of the people said, though others cautioned that talks could still fall apart.The foundation said that it “fully supports the company in implementing its strategy and realizing its full potential which includes to take an active role in the consolidation of the industry.”

Agility couldn’t be immediately reached outside of regular business hours.

Panalpina has been bracing investors for a bold move to address doubts about its capacity to integrate a bigger player. Unlike DSV, it only has a track record of doing smaller deals. The firm is prepared to make a transformational acquisition that could be partly financed by selling debt, CEO Stefan Karlen said in a phone interview on February 13.

The Basel-based company has a strong balance sheet, no debt and recently executed a swift, Swiss franc bond sale, Karlen said. “We have other sources as well which would support a transformational deal,” he said. He declined at the time to comment on DSV’s proposal as well as any specific potential takeover targets or merger partners, including Agility.

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